Michael Cyprys, an analyst from Morgan Stanley, maintained the Buy rating on LPL Financial (LPLA – Research Report). The associated price target remains the same with $413.00.
Michael Cyprys has given his Buy rating due to a combination of factors surrounding LPL Financial’s strategic acquisition of Commonwealth Financial Network. This acquisition is expected to significantly enhance LPL’s asset base by adding approximately $285 billion in assets under custody, representing a 16% increase. The transaction is projected to be financially beneficial, with management anticipating a low single-digit earnings per share accretion by the end of 2026.
Strategically, the acquisition positions LPL Financial to strengthen its competitive edge in a fragmented industry by consolidating fee-generating assets. The integration of Commonwealth’s high-quality, organically growing platform is expected to improve advisor retention and satisfaction, which could attract more advisors and assets to LPL’s platform. Additionally, the acquisition aligns with LPL’s historical transaction range, being valued at approximately 8 times EBITDA, which underscores its financial prudence and strategic fit.
In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $405.00 price target.
Based on the recent corporate insider activity of 68 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of LPLA in relation to earlier this year.